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How can effective problem solving save money?

Updated: Apr 16

You may be wondering what kind of ROI you'll get by implementing a problem solving process. You're investing in training materials, software tools, staff time, etc. but what are the monetary benefits you can expect? We've outlined some of them below.


Eliminating Repeat Problems Solving the same problems over and over is a huge and very tangible cost that is easy to calculate. Say, for example, a problem repeats once per quarter. It may cost you $2,500 each time it recurs (in downtime, resending a new product to the customer, rework, scrap, etc.). Once you find the true root cause of the problem and a permanent solution, the problem will stop recurring, saving you $10,000 annual. Multiply this across your various sites or product lines and you could be talking about hundreds of thousands each year.   As you solve more and more problems, this number will continue to grow exponentially, especially if you have a method to share the information across all global sites. That way, when a problem is solved at one site, that solution can be transferred to other sites.


By implementing a problem solving process, you can ensure that all problems, even small ones that are fixed quickly, are solve to root cause and will not recur. This seemingly obvious practice will save millions over time.

Improving Customer Relationships Keeping your customers happy is an essential part of any business and not causing them problems is key. Having an effective and standardized problem solving process in place can help keep customers happy in a variety of ways:

  • Problems won't repeat.

  • They will see the thought and care you put into performing root cause analysis and trust you over your competition.

  • You can send customers uniform and polished reports, making your company stand out against your competition.

  • Your customer retention will improve.


This ROI is easy to calculate: if you lose 1 or 2 specific customers, how much income will you miss out on. By investing in problem solving, you're making an investment in customer satisfaction. In turn, your customers will trust you and bring you more business.


Investigating Supplier Problems

Supplier problems could be costing you huge amounts of money. By solving them to root cause, you will not only stop them from repeating, but you will also be able to prove fault to your suppliers and, in turn, create chargebacks to recoup monetary losses.


This will also enable you to compare suppliers' performance. By understanding which suppliers are causing you the most headaches, you will know who's worth keeping around and who should be kicked to the curb.


Administering a Standard Problem Solving Process

Formal processes are in place for many reasons--to create uniformity, eliminate confusion, and improve efficiency. The same ideas apply to problem solving.


If there is no process for problems, folks will either skip root cause analysis completely or create their own ad-hoc tools. This creates more work for everybody. By having a standard process in place, everyone will be on the same page, know exactly what's expected of them and be able to solve more problems in less time, saving boatloads for your bottom line.


We hope this motivates you to improve your problem solving skills or develop a formal process in your company! Drop us a comment if you have experienced any other areas where problem solving saves money.

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